"I wasn't ripping off people; I was ripping off insurance companies." -- Accused burglar Bernard Welch in a Life magazine interview.

Last June the upper Northwest Washington home of Samuel Shaffer, a retired magazine correspondent, was burglarized. He filed a claim for $1,879 on his homeowner's policy with Aetna Life & Casualty, which was promptly paid. Six months later Shaffer received a letter from Aetna, stating, "We're sorry, but we won't be able to renew your homeowners policy."

As justification the company cited the "frequency of (his) losses -- two losses in the past two years." True, Shaffer had filed a claim in February 1979 for $752 to pay for damage to his garage when a tree fell on it. But these were the first two losses he had claimed in 18 years as an Aetna policy holder!

Shaffer was incensed. "Are there no restraints upon an insurance company against such arbitrary actions? Does the D.C. Superintendant of Insurance condone such actions?" he asked.

An Aetna spokesman maintained there had been a mixup, that after the second loss the company had written Shaffer's agent, Dreyfuss Brothers Inc. of Bethesda, stating it intended to raise his deductible from $50 to $250.

When it received no reply from Dreyfuss, Aetna assumed Shaffer was unwilling to accept the new terms, so it had no alternative but to refuse to renew the policy. Shaffer said neither he nor his agent had ever received such a letter. Aetna is searching its files for a copy. Meanwhile, it has renewed its offer of a higher deductible.

In the opinion of other insurance companies, independent agents, insurance regulators and a consumer group monitoring insurance, Shaffer's case appears to be an aberration. Yet it provides some insights on the insurance situation at a time when losses are mounting.

According to the FBI, burglary losses nationwide amounted to $2.1 billion in 1979. During the first six months of 1980, the number of burglaries went up 12 percent across the country. Yet the D.C. Police Department reported 41 percent more burglaries during the third quarter alone. d

Industrywide figures for insurance claims have not yet been tabulated, but those of the leading insurers in this area indicte that losses per incident are also higher.

This is due primarily to the soaring cost of precious metals and gems, which induces burglars, as Welch is alleged to have done, to go for sterling silver and gold jewelry in addition to more prosaic television and stereo sets. s

Aetna, the leading insurer in D.C. with 11.7 percent of the homeowner market, reported a 131 percent rise in theft claims in D.C. during the first half of 1980, compared with 114 percent nationally.

Hartford Casualty Insurance Co., second largest here, said 1980 burglary claims in the area rose 55 percent to $1.6 million, versus 40 percent in the country as a whole. Allstate, No. 2 in Maryland and Virginia, reported payouts up 61 percent.

Nationwide, third largest carrier in Maryland and Virginia, calculated theft claims increases of 91 and 50 percent there respectively; 76 percent in the District, compared with 55 percent nationally. (These figures are not adjusted to account for additional policy holders.)

Who pays? According to the National Underwriter, insurance companies in 1980 lost an estimated $4 billion in underwriting property and casualty losses, close to a record. However, they earned about $11 billion from investments, for a net gain of $4 billion.

This makes insurers hungry to write new business to fuel their investments, said independent agent Jerry Smith of Patterson & Associates in Bethesda.

He also described metropolitan Washington as a very competitive area. Consequently carriers have not increased their basic rates for homeowner policies. Instead, many of them have elected to double the rate for silverware as a scheduled item to an average of 50 cents per $100 of appraised value.

Other underwriting actions a company can take to combat mounting losses include raising the deductible, reducing or eliminating coverage in areas where losses are concentrated (fires due to careless smoking, for example), or nonrenewal.

Aetna said it did not monitor which action was taken in how many cases, although it once did a study showing just 2 percent of all policies were involuntarily not renewed. Allstate had 39 nonrenewals in D.C. last year.

As a rationale for the action taken in Shaffer's case, Aetna's letter referred to "guidelines based on our past experience (which) help us determine whether or not each customer is eligible or not for this type of policy."

This reporter sought to obtain these guidelines to know what point a customer risks possible changes or restrictions in coverage. Shaffer's agenct was unfamiliar with them, and at first Aetna protested there were no such formal guidelines, a refrain echoed by many other companies contacted.

Finally, Aetna's personal insurace department director, Joseph G. Fortunato, etched out the following guidelines loaded with many caveats:

The company will review a policy for possible changes or resrictions if a customer files two or more claims in less than three years, suffers a single loss of $25,000 or more, or has two claims of the same type, especially after a warning.

An example would be if a homeowner ignored a warning from a claims inspector that a second tree in his backyard should be cut down before it, too, fell on his house, or special locks should be installed to deter a repeat burglary.

Many carriers declined to discuss guidelines at all, pleading competitive reasons or that "every case was different." To this an independent agent, who did not wish to be quoted, added that the customers of an agent who does a lot of business with a carrier and/or has a low loss ratio may get a better deal on underwriting action than the customer of an agent who does less well by the insurer.

To the extent that carriers would discuss guidelines at all, they agreed more or less with Aetna's.

The companies were asked why the guidelines were neither outlined in policies nor routinely explained by agents so that customers could make informed decisions as to whether filing a second or third small claim, for example, would end up costing them more than it was worth in the form of a higher deductible or nonrenewal.

"No one ever asked," said one. "Persons should use their common sense," another replied. Notwithstanding, there is no sure way to judge one's risk and no adequate outside recourse.

Acting D.C. Superintendant Jim Montgomery said a company must provide a "reasonable explanation" of nonrenewal when a complaint is made. "But that does not mean the reasons have to be reasonable," he added. One or two states now have rules on nonrenewal; the District does not.